Public Limited Company
A public Company issues shares to the public. And it's a business organization that trades on a public stock exchange. As per the Companies Act 2013, a business can become a public limited Enterprise. And this type of Company may issue shares to the public in exchange for funding. It is allowed as a listed Company because it gets its capital after obtaining listed on the recognized stock exchange through IPO.
What is Public Limited Company Registration (Overview)?
For Public Limited Company incorporation, the Company should have 7 Shareholders, minimum of 3 Directors, and a Maximum of 50 Directors and need Rupees 5 Lakh of Paid up Capital. A Public limited company has all the benefits of a Private Limited Company and the power to have any number of members, more transparency, and ease in the transfer of shareholding.
Public limited company registration fees:
Public Limited Registration is done through Vakilkaro. Registration fees of public limited Companies are minimum, please. Contact Vakilkaro today for easy registration of public limited Companies.
Element of Public Limited Company: Some essential characteristics of a public limited company are as follows:
• Board of Directors:
As per the Company's act, three boards of directors are required to form a public limited Company, but no maximum limit is given for directors.
• Name of the Company:
All publicly traded Companies must legally involve "Limited" to their name. It's a mark used to identify a company. That is open to the public.
• The Company's Prospectus:
A company prospectus is needed for all publicly traded corporations. It's being allocated to the public at large by the planned corporation. This document provides a summary of the Company's financial status and activities.
• Authorized and paid-up share capital
A public limited company will have a minimum has Rupees 5 Lakhs share capital.
Advantages of Public Limited Corporation:
• Management: It is the Board of Directors' authority to manage the affairs of the Company. The Company's members provide this authority. The Company's investors choose members of the Board of Directors through an elected voting process.
• Independent Legal Entity: There is a clear segregation of control and ownership in a public limited company. The members of the public limited Company choose the board of directors, so public little company control by the board of directors.
• Various financing sources: A public limited company can arrange funds from multiple sources like Equity, preference, debentures, bonds, and by all other financial institutions.
• Easily transferrable shares: The benefit of a Public Limited Company is that its shareholders can quickly transfer their shares to other legal entities, such as organizations or individuals in India or elsewhere.
• Limited liability: In a public limited company, shareholders have minimal legal responsibility for the Company's affairs. The stockholders shall be unaffected if the Company itself suffers any unanticipated liabilities.
• Extension prospects: When a company has more money on the books, it can benefit from many expansion opportunities, mainly if it's a publicly traded limited liability company.
• Spreading risk: Because the shares are sold to the public at large, the unsystematic risk of the market is expanded.
• More awareness: Being listed on a stock market ensures that hedge funds, mutual funds, and other traders take note of the business of the Company. This may result in the best business opportunities for the Public Limited Company.
The disadvantage of a public limited Company:
• Insufficiency of confidentiality
The Public Limited Company will full public report to maintain shareholder confidence and transparency.
• Expensive Business Form
Setting up the Company as a public company is too costly. A substantial amount of money, effort, and steps should be necessary to launch a public limited company. The profit of the Company depends on public investment.
• Unstable Stock Markets
A company's success is repeatedly measured by its share price, so a down in your share price can impact how investors perceive your Company.
• Possible for A Loss of power
In any public limited company, the shareholders have control over the business, although shareholders could be small. This means that the directors of the Company are responsible to the shareholders. If more than 50% of a company's shares are sold, another shareholder will increase by 50%. And more than 50% of a shareholder can affect the decision of the Company.
Eligibility Criteria for PLC Registration or Guidelines for Public Limited Company Registration: Listed following are the prerequisites that should be met to register a public limited Enterprise
• A Public limited company Registration requires three directors.
• A Public limited company requires seven shareholders to incorporate.
• At least one director needs a DSC (Digital Signature Certificate) to sign digitally.
• All preferred company directors must get a Director Identification Number (DIN).
• Submit a principal Object Clause application. The object clause details the Company's goals after registration.
• Apply for Registrar of Companies (ROC) with required documents like MOA and AOA.
Documents Required for public limited company registration: The following documents are required for the registration of a Public Limited Company:
• Documents of all directors and shareholders:
1. PAN of all directors and shareholders.
2. Aadhar card of all directors and shareholders.
3. Driver's license of all directors and shareholders.
• Address proof of all directors and shareholders
• Telephone, gas, water, and power bills of the registered office. But all this bill should be old for at most two months.
• NOC from the building owner where the registered office is situated.
• All Directors Will Obtain the Digital Signature Certificates.
• All Directors' DIN (Director Identification Numbers).
• MOA & AOA.
Registration Process for a public limited company
Step 1: Receive DSC and DIN:
• First, getting a director's Digital Signature Certificate (DSC) must be done. Electronic and digital signatures both require the same information. The certifying authority issues this compulsory document.
• Furthermore, all proposed company directors must register for a DIN (Director Identification Number). The MCA has streamlined the procedure of acquiring a DIN; directors may apply simply by filling out the SPICe form.
Step 2: Submit company name:
• The next step is to see if the desired company name is available on the Ministry of Corporate Affairs (MCA) website. After seeing the MCA portal, select the MCA services and look for name availability. The suggested name, however, should not replicate an existing service mark or trademark.
Step 3: SPICe+ Form Submission:
• The applicant may apply for a Certificate of Registration by filing the SPICe+ form once the proposed name has been approved. The applicant should also submit all required documents alongside the form, including a Memorandum of Association and Articles of Association.
Step 4: Certificate of incorporation:
• When ROC receives all documents approved by the appropriate authorities, the ROC will issue a certificate of incorporation to the Company.
Step 5: Obtaining Company PAN and TAN:
• Once the Company has its Certificate of incorporation (COI), the director and members may apply to the MCA for a Permanent Account Number (PAN) and a Tax Deduction Account Number (TAN Registration) to be issued in the Company's name (MCA).
Step 6: Open a New Bank Account:
• It is now simple for the Company's directors to open a current account in the Company's name by providing the bank PAN card and the Certificate of incorporation (COI).
Annual compliance of public limited Company:
• MGT 7: Annual return will file by the public Company within 60 days from the end of the annual general meetings.
• AOC 4: Annual accounts will file by the public Company within 30 days from the end of the annual general meetings.
• ITR: Every Company where a tax audit is done will file ITR by 30th September.
• MGT14: Every Company will file MGT14, in MGT 14 contain details of adopting of annual account and director's reports.
• SEBI Compliance: A public limited company will comply with all SEBI-related rules and regulations.
• REGULATION 24A: Secretarial Audit will be done within 60 days of the end of the fiscal year.
• REGULATION 43A: The top 1000 listed firms (by market capitalization) should expand a dividend distribution policy. Declare at the website, and involve a web link in the yearly report.
• SEBI LCB Circular: Public Limited Company will Prime Disclosure relating to classification as a significant corporate borrower within 30 days from the end of the financial year.
• SEBI LCB Circular: A public limited company will make an Annual Disclosure relating to incremental borrowing by a big Corporate Borrower within 45 days from the end of the financial year.
• REGULATION 44: Voting results should be submitted within 48 hours of the conclusion of the General Meetings.
• REGULATION 34: Furnish a copy of the annual report that was distributed to shareholders & the notification of the annual general meeting. The submission will be submitted to the stock Exchange and published on the website. If any changes are made to the annual report, a verified copy needs to be sent with the details and reasons for the modifications. For annual reports, the last date is the day that distribution to shareholders begins.
• The annual General Meeting is held on a will yearly basis.
• 4 Board meetings were held in the year
• MGT15: File form MGT-15 to furnish an exclusive report on the Company's AGM.
1. How many people are required to incorporate a public limited Company?
To incorporate a public limited company minimum of 3 directors and 7 shareholders is required.
2. Do I have to be present in person to register a public limited company?
No, all documents will be signed, scanned, and forwarded to our office mail id. However, some documents will have sent physically to our office.
3. Can a minor become a director of a public limited Company?
No, any minor will not become a director of any company.
4. What is the statutory requirement to fulfill by a public limited Company?
Every public limited Company should call four board meetings in a year and one annual general meeting in the prescribed time and file all forms with ROC under the time limit given by the companies act 2013.
5. Can Foreign nationals and NRI become a director of public limited Companies?
Yes, they could become a director of the Company.
6. What are mandatory to comply with all guidelines of the security exchange board of India by listed public Companies?
Yes, a listed public company will comply with all guidelines of SEBI.
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Difference between public limited Companies and private limited Companies:
Particular Public limited company Private limited company
Meanings A PLC means, a company listed on the stock exchange, and all shares of the company will be publicly traded. A Private limited company means a company that issues all shares to the private members concerned and a company not listed on the stock exchange.
No. Of Members Minimum of 7 members and the maximum limited of members is unlimited. Minimum 2 members and maximum limited of members is 200.
No. Of Directors Minimum 3 directors Minimum 2 directors
Transfer of shares The shares of a public limited company is freely transferable, like, freely tradable in a stock exchange. Shares of a private limited company are not freely transferable, as the AOA contains restrictions.
Public subscriptions It can invite the public to subscribe for its shares or Debentures. Issuance of shares or debentures to the public is prohibited.
prospectus public limited company may issue a prospectus Issuing is prohibited.
Minimum allotment The company can't issue shares unless it reaches the minimum subscription described in the prospectus. Private limited company may allot shares without receiving a minimum subscription.
Business start After registration, it obtains a certificate of commencement of business. You can start a business immediately after obtaining an extract from the commercial register.
Appointment of director 1 director may be appointed by 1 resolution 2 or more directors can be appointed by 1 resolution.
Statutory meetings Statutory meeting is compulsory. The statutory meeting is optional.
Suffix Use A public limited company must mandatory involve the words “Limited” in its name. A private limited company must mandatorily involve the words “Private Limited” in its name.
Reports to the public A public company should mandatory issue quarterly and annual financial statements to the public. A private limited company does not have to disclose its financial result to the public.
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